Agency and Employment Law

After a business is set up, the owner or shareholder must ensure that its operations are efficient and that it is shielded from potential liability. The risk of potential liability is common for both small and large businesses, but such a scenario may be tricky for the smaller businesses with limited resources. The relationship established by the law of agency represents such risks, where a business can be held liable for the wrongful conduct of an employee as an agent. Under the agency principle, an employee can carry out operations or activities on behalf of the business and this happens on a daily basis (Cheeseman, 2016). The agent enters into contracts with customers or suppliers on behalf of the firm, and this means that principle brings about liabilities in case of a wrongful conduct of the employee. This applies where such conduct is carried out within the scope of existing relationship between the agent and the business as the principle. This represents a threat to the organizations that may be forced to bear financial costs due to litigations emerging from the wrongful conduct of agents that may have affected other parties. As long as the agency relationship is created after the business gives assent for the employee to operate on its behalf, the business is bound to bear any cost arising from liabilities incurred in the process (Cheeseman, 2016). The agency relationship can present opportunities to the firm where strong internal procedures and internal policies have been set up. Such measures limit liability by ensuring that employees’ activities are put under check.

The effect of agency-relation may involve how the employees can avert personal responsibilities, where they have to show that took and considered all the appropriate steps to prevent or reduce potential liability to the shareholders.  The problem is that they should prove that the actions taken were expected from a person with sufficient knowledge and skills level and professional experience (McCallum, 2008). Other challenges may emerge from the notion that an employee as the agent is the one with power to influence legal relations between third parties and the principal – business.  This involves legal relations in the reference to liabilities in tort, contractual and proprietary duties and rights. The employee will be cautious so as to absolve him or herself from any liabilities or costs arising from their activities on behalf of the business. 

 The express or implied agency or apparent authority estops an employer from denying liability for the agency relationship that is created with employees. The relationship can only be stopped by Acts of the parties including lapse of time, mutual agreement, occurrence of a certain event or if the intended purpose is achieved.  The other reason for termination includes the operation of the law in case of death, insanity, performance impossibility or bankruptcy (McCallum, 2008). Outside such reasons, the termination of the relationship can be deemed to be discrimination and the employer will be liable. In addition, the apparent authority allows any employee to act in case of an emergency and no time for consultation and therefore providing opportunities everyone at all times. In all the cases the principle has consented, impliedly or expressly that the agent act on their behalf, and that the agent is subject to the control of the principle (Cheeseman, 2016). Therefore, all the employees have the power that is manifested by the principles consent to them to carry out their activities without fear of prejudice or being targeted for the liabilities or costs that may arise. In addition, the employees are granted the apparent authority to influence the legal relationship by those acts they carry out after the consent manifested by the principle. All the employers are granted implied or express authority to do those acts that are ordinarily or naturally done and which are necessary without fear of being of carrying resulting liabilities due to gender, race or disability. As long as the agent or employee is of sound mind and acts naturally or ordinarily, the relationship shields them from discrimination.

There are federal laws and state laws that prohibit discrimination practices at workplaces, based on various aspects such as gender, race, age, national origin, marital status, disability or religion. The state laws are similar in nature to the Federal laws with some additional protections against discrimination (EEOC, n.d).  The federal laws include Title VII - Civil Rights Act of 1964 which make illegal to discriminate against a person due to their color, race, sex, belief or national origin (EEOC, n.d). It prohibit retaliation against someone because of they complained, filed a charge or took part in investigations due to discrimination. The Pregnancy Discrimination Act is prohibits discrimination of women due to pregnancy or issue related to birth.  Others include the the Age Discrimination in Employment Act of 1967, Equal Pay Act established in 1963, and the Americans with Disabilities Act of 1990 (Title I) (EEOC, n.d).  These prohibit discriminating a person due to their age and disabilities while providing equal payment for men and women performing same work at the same place. The Rehabilitation Act of 1973 prohibits discrimination in federal government against a person who is qualified and disabled. The Genetic Information Nondiscrimination Act of 2008 makes it illegal to discriminate a worker or even an applicant due to their genetic information, including information about personal or family member’s genetic tests or information about conditions, disorders or diseases of family members (EEOC, n.d). Across the various states, the laws been adjusted to add various aspects on which discrimination is illegal. 

 Employees are offered protection against discrimination or harassment at the workplace, but such protection is not provided for the independent candidates. The employees are shielded from unlawful discrimination due to various factors like gender, race or age, wrongful termination, compensation for workplace injury, low wage rates and even workplace safety. The employee is allowed to join or form trade unions that can protect their rights (McCallum, 2008). Independent contractors cannot form unions and therefore their protection is founded on some laws. The law gives the contract the responsibility to pay estimate taxes which protects their financial interest, since they pay tax liabilities and file returns. The law provides the contract a right to be paid and own the work. The terms of contract determine the payment (McCallum, 2008).

Reference

Cheeseman, H. R. (2016). Legal environment of business: Online commerce, business ethics, and global issues.